Enforcement of Subdivision Restrictive Covenants – Rule 56(f), Ala. R. Civ. P. – Indispensable Parties

Cole v. Davis, et al., [Ms. SC-2022-0723, Mar. 24, 2023] __ So. 3d __ (Ala. 2023). The Court (Cook, J.; Parker, C.J., and Wise, Bryan, Sellers, Stewart, and Mitchell, JJ., concur; Shaw and Mendheim, JJ., concur in the result) affirms the Madison Circuit Court’s summary judgment enforcing subdivision restrictive covenants preventing Trevor Cole from subdividing his lot in the Kirkwood Heights subdivision.

The Court first analyzes whether Cole was due relief from the covenant under the relative-hardship test. The Court notes this is an affirmative defense requiring Cole to prove that “the restrictive covenant has ceased to have any beneficial or substantial value or the defendant will be subject to great hardship or the consequences would be inequitable, a court, applying equitable principles, of equity will not enforce the covenant.” Ms. *13. The Court concludes “Cole has failed to meet his burden [of proof] and, thus, has not demonstrated that he is entitled to relief under the relative-hardship test.” Ms. *18.

“Under the change-in-the-neighborhood test, ‘a restrictive covenant will not be enforced if the character of the neighborhood has changed so radically that the original purpose of the covenant can no longer be accomplished.’” Ms. *19, quoting AmSouth Bank, N.A. v. British W. Florida, L.L.C., 988 So. 2d 545, 550 (Ala. Civ. App. 2007). The Court concludes “[n]one of the alleged violations of the Kirkwood Heights covenants claimed by Cole indicate that the subdivision has undergone such a radical change since its inception that enforcing those covenants in this case would be improper. The evidence indicates that there is only 1 subdivided lot among the 52 lots that are subject to the Kirkwood Heights covenants.” Ms. *21.

The Court rejects Cole’s Rule 56(f), Ala. R. Civ. P. argument and explains “it is Cole’s burden under Rule 56(f) to demonstrate that the evidence sought by his discovery requests is “crucial” – not merely that he has issued discovery requests. Conclusory statements are not enough.” Ms. *24.

Noting that a decision on whether absent parties are indispensable under Rule 19 lies within the trial court’s discretion, the Court rejects Cole’s argument that all lot owners in the subdivision were indispensable parties and explains

The trial court’s entry of a summary judgment had no effect on other property owners’ legal or equitable interests in their real property that is subject to the Kirkwood Heights covenants. All the issues before the trial court center on whether Cole’s lot is subject to those covenants and, if so, whether Cole’s proposed subdivision of his lot violates those covenants, thereby warranting the issuance of an injunction. The permanent injunction issued by the trial court in this case is narrowly tailored to Cole’s lot.

Ms. **30-31.

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